Question

Due to the credit crunch that developed during the Great Recession, many small businesses found that __________ were more willing to lend money to smaller operations.

Answer 1

The correct answer is letter "D": smaller, community banks.

Step-by-step explanation:

The Great Recession is the economic fall that occurred between 2007 and 2009 as a result of the housing bubble burst in the U.S. During this period many well-known firms such as Chrysler, General Motors, and Lehman Brothers filed for bankruptcy. However, not all the business experienced a downturn.

A study conducted by the Federal Reserve Bank of St. Louis (2013) indicates that 417 banks and thrift institutions failed between 2006 and 2011 but 702 small community banks reported total assets of around $10 billion by allowing individuals to benefit from loans. Banks and thrift institutions were too conservative in loans during the Great Recession which was interpreted in lower revenues.